1. THE ROLE OF THE CIDB (GOVERNMENT) IN BALANCING INFRASTRUCTURE DELIVERY …AND DEVELOPMENT EC – Summit 26 March 2015 Gerard Naidoo

2. Presentation outline
CIDB role - the regulator and delivery champion What is Contractor Development (CD)? What does CIDB do in support of CD? CIDB CD Value Adds Some Tips and advice

3. What is cidb ? Construction Industry Development Board
Schedule 3a entity
Reporting to Minister - National DPW
Regulatory and developmental support
Client/ public sector risk management
Act 38 of 2000

4. cidb Act 38 of 2000
Promote sustainable growth of the construction industry and the sustainable participation of the emerging sector in the industry
Promote improved performance and best practice of public and private sector clients, contractors and other participants
Promote procurement and delivery management, the uniform application of policy throughout all spheres of government, uniform and ethical standards including a Code of Conduct
Establish Registers as a tool to systematically regulate and monitor the performance of the industry and its stakeholders

5. CIDB as Regulator … and delivery champion

6. INDUSTRY DELIVERY CHALLENGES
Limited technical capacity in the public sector
Poor planning
Poor response to the social agenda
Poor procurement / contract management strategies
Inadequate capacity and inefficient management systems and processes
Weaknesses in institutional arrangements
roles, responsibilities and accountability between clients not clearly defined and understood
Poor interdepartmental relationships
The infrastructure delivery cycle is not appropriately aligned with the MTEF budget cycle
Poor reporting on spending and performance
Weak procurement systems
Poor ethical practices in industry / public sector
Collusion
Tender fraud
Delays in payments
Non compliance to regulatory prescriptions

7. CIDB FOCUS AREAS AND INTERVENTIONS
Improved Infrastructure Delivery Management
IDMS (Infrastructure Delivery Management System)
Gateway system with NT and public sector client rollout
Client capacitation (Skills and Support)
Implementation of the prescripts
Training and capacitation
Stakeholder management
Legal and compliance
Legislation (new developments; maintenance)
Enforcement (compliance; investigations; laying charges; hearings; fines and penalties)
Code of conduct (collusion; corruption; fraud)
Regulation + Practice Notes + Best practices
Compliance monitoring:
Code of conduct, Reg’s, RoP + AG

8. Compliance; Tender Notices, Provincial Departments
2012Q3
2014Q1 EC
42%
84% FS
85%
92% GP
45%
78% KZ
19%
23% LP
73%
89% MP 0%
32% NC
51%
58% NW
37%
98% WC
95%
Total
44%
63%

9. Sustainable Development ! (Infra book and SIPS)
WHY CD?
The infrastructure delivery legacy…and?
Ensuring fiscal contributes towards:
Transforming the industry
Meeting socio-economic objectives
Balancing delivery and empowerment
Sustainable Development ! (Infra book and SIPS)

10. Quarterly Monitor; Black-ownership (GB; 5%+)

11. What is Contractor Development (CD)?

12. What is Contractor Development (CD)?
CD is a deliberate and managed process to achieve targeted developmental outcomes that improves contractor:
Grading status
Performance and quality
Equity and targeted ownership
LEARNERSHIPS Grades 1 to 2
ENTERPRISE / CONTRACTOR DEVELOPMENT Grades 2 to 6
PERFORMANCE IMPROVEMENT Grades 4 to 7
Components of Development:

13. Contractor Development Mandate:
…promote sustainable growth of the construction industry and the participation of the emerging sector… (CIDB Act 38 of 2000)
The DPW-CIDB MINMEC mandate is to design and drive the implementation of a Contractor Development Framework that must uniformly apply throughout South Africa in respect of registered contractors

14. DPW MinMEC – ncdp launch
Approved: NCDP FRAMEWORK AND GUIDELINES on 21 SEPTEMBER 2012
MINISTER THULAS NXESI LAUNCHED NCDP ON 06 DECEMBER 2012 (KZN)

15. National Contractor Development Programme
Facilitating Contractor Development
NCDP Objectives
Improve grading status
black and women-owned companies in targeted categories
sustainable contracting
Improve performance
NCDP addresses:
Components of CD
Key success factors for CD
Enabling mechanisms for CD
Principles for CD
Role of participant stakeholders
Monitoring and evaluation
Communication Strategy

16. Contractor Development Programmes (CDPs) are provided by:
National and Provincial Infrastructure Departments
EPWP
Client entities
Municipalities
Organisations and associations
Development agencies and corporations
Established industry

17. Partners & Stakeholders in delivering CD

18. Methods of delivering contractor development
Direct (incubator)
NCDP: Contractor Development Generic model (Incubator)
TARGETS, ENTRY AND EXIT CRITERIA
WORK OPPORTUNITIES SCM
SKILLS, PERFORMANCE, EVALUATION, GRADUATION
CONTRACTOR DEVELOPMENT PROGRAMME
TRAINING, MENTORING, ENABLING ENVIRONMENT
Indirect targeting
(using procurement)

19. Indirect Procurement Strategies in support of CD
Unbundling
Using Potentially Emerging Status
Using Joint Ventures
Using subcontracts
Bundling and Targeting
Term Contracts

20. Mechanisms for implementing CD: Guidelines
E-LEARNING…

21. What does CIDB do in support of Contractor Development?

22. PROGRESS: Creating an enabling environment for CD…
Policy (ncdp and cidb CD strategy ) and framework
CDP Guidelines for implem (2012)
cidb Provincial offices support ( …)
Client and stakeholder capacitation and participation:
- National and Provincial Forums: PCDFs and CPO’s
- Tips Brochures eg. Clarity on ‘set asides/ ring-fencing’
- cidb Inform Practice notes eg.
PrN 29: Set-asides (July 2012)
PrN 32 :Applying PE status (2014 draft)
CDP Monitoring system ( …)

23. What does CIDB do in support of Contractor Development? Cont.
Partnered CIDB Provincial offices

24. CIDB/NCDP does not provide
Work/Contracts
however CIDB shapes the procurement environment in support of Contractor Development
Training
But CIDB provides catalytic support and facilitates links
Funding/finance
But CIDB facilitates access to funding

25. Issuing of practice notes to support clients and consultants
Contracts
Procurement Reform supporting Contractor Development using Practice Notes
Issuing of practice notes to support clients and consultants

26. Training
Catalytic Training

27. Access To Financiers & Information
Finance
Access To Financiers & Information

28. NCDP FORUMS: Provincial Implementation
The Provincial CD Forum provides added value to the participating organisations in the following areas:
Provides opportunity for participants to increase awareness and visibility to their services
Launching joint projects
Knowledge transfer & Sharing information
Facilitate the exchange of good practices and expertise
Reporting on, and analysing statistics from programmes
Facilitating Provincial Contractor Development Programmes eg. NC

29. Success factors: Payment on time
Success factors: Payment on time! Competition… Fraud & Corruption awareness and reporting
FRAUD
REPORTING
ANONYMOUS
HOTLINE
(CIDB) 2432

30. CIDB CD Value Adds

31. CIDB CD Value Adds
Policies and Guidelines
Best Practices

32. CIDB CD Value Adds Status, Statistics and Analysis
Tips & Advice Brochures

33. Tips and Advice (tricks?) ….for officials and contractors

34. Publications in Support of Contractor Development

35. Contractor Tips & Advice: Financial Management
Understanding basic principles and laws that govern a business.
Maintain strict separation between business finance and personal finances
Financial management systems
Reinvesting money into the business
Avoid cession of payments
Avoid split banking
Present a true financial position of the enterprise
Keep records of all business transactions
Keep track of your liquidity ratio
Insurance
Use of professionals
Facilitating access to finance for contractors
Understanding basic principles and laws that govern a business.
Maintain strict separation between business finance and personal finances
Financial management systems
Reinvesting money into the business
Avoid cession of payments
Avoid split banking
Present a true financial position of the enterprise
Keep records of all business transactions
Keep track of your liquidity ratio
Insurance
Use of professionals.
Facilitating access to finance for contractors

36. 7 tips on Deadly Sins in tendering
Not attending the tender briefing
Not having the required documents
Late submission
Poor Presentation and layout
Misrepresentating your company or capability
Not following the tender requirements
Not triple-checking your document pack

37. Tips and Practice Note #29… Clarity of set-asides
FACILITATING
IMPLEMENTATION...

38. Addressing Contruction Business Cash-Flow Problems

39. Registration of Projects

40. National Contractor Development Program: Framework

41. Contract pricing strategy by the clients

42. Contract pricing strategy by the clients

43. Taxation for a Construction Business

44. Tender processes for public sector procurement

45. Marketing your Construction enterprise

46. Construction health and safety
Role of key authorities:
NHBRC
Dept of Labour
Municipal inspectors

47. Technical Guides

48. Implementing Employment Intensive Road works: a CIDB guide to best practice

49. Labour-based methods and technologies for employment intensive construction works- a Cidb guide to best practice

50. Best Practice Recognition Scheme

51. Tips on Sustained growth: Growing a small business
Grading system
Growth case studies
Experience and skills
Strong financial base
Good supplier relationships
Increasing Market share

52. A quick guide for contractor registration

53. Checklist for contractor registration

54. Guidelines for contractor registration

55. Tips - Avoid common causes of contractor registration delays
Non compliance-a major problem with applications (incomplete documents):
The registers checklist- a guide to compliance
Certificate of completion must come from client (Completion invoices/ payments)
Tax clearance certificate – Valid and original
Potentially Emerging ( PE) status
Certified ID, share certif and financials

57. Discussion / questions
Gerard Naidoo
Discussion / questions